The table below shows correlations between pairs of investments. This is the correlation of calendar year total returns available for both investments.

Interpretation

Correlation is important for diversification. A diversified portfolio includes assets with low or negative correlation.

Assets that are highly correlated (correlation closer to 1.0) tend to lose value at the same time. Investors with large sums of money in highly correlated assets risk substantial losses. Uncorrelated assets (correlation closer to 0.0) tend to move up and down independently of one another— when one goes down, the other may go up or down with normal probability. For example, gold and bonds are the best diversifiers to the S&P 500 in this table.

Unfortunately, all we can provide are historical values. These should be helpful, but correlations will change in the future.

Examples

The correlation between gold and the S&P 500 has been -0.14. This comes from the table entry under the S&P 500 column, in the gold row. That correlation is based on calendar years from 1955 to the last full year (2024), because those are the years with data for both assets. This small negative correlation indicates that these assets move slightly in the opposite direction, on average—when one goes up the other goes down slightly.

Table of correlations

Related links

S&P 500 historical annual returns

Dow historical annual returns

Real estate (REIT) fund VNQ historical annual returns